Velliv disputes ‘misleading’ reports on its capital position

Danish pension provider Velliv has argued that an article in broadsheet newspaper Jyllands-Posten included a “misleading” mention of the company’s capital position.

Providing raw data, the company said its solidity would be clear when it released its annual accounts for 2020 on 8 March and stated that this would show compliance with the company’s policy of always having a solvency coverage of between 150 and 170 per cent.

In a statement on its website, Velliv stated that a comparison between itself and other companies had been based off of a misunderstanding stemming from the fact that Velliv is two years ahead of the deadline for implementing the European Union’s new and stricter Solvency II rules.

The Danish Financial Supervisory Authority asked Danish pension companies to implement Solvency II in 2016, with Velliv now having completed the move but large portions of the rest of the industry having postponed the move until the latter half of 2022.

A joint statement from Velliv CFO, Gitte Aggerholm, and responsible actuary, Charlotte Markussen, said: “The stricter requirements mean that, for the uninitiated, it may look as if our solvency is under pressure - or that we have put more expected customer earnings into our calculations than we should. Neither part is the case.

“The short of the long is that the requirements for the security we provide our customers are higher. It's a bit like if one municipality out of 98 has introduced the latest climate calculations for torrential rain and changed the conditions for sewerage - while the others have not. Then the requirements are stricter for the homeowners in the municipality in question.”

The duo went on to reassure customers that they were “in good hands”, commenting that the company had a “conservative risk management model”.

Velliv was not alone in disputing the company’s portrayal, with FPension director, Søren Andersen, stating: "It is my impression that Velliv is at least as competitive as the competitors, and that all Danish pension companies are otherwise extremely efficiently run."

RTM pension expert and director, Mogens Rosengaard, said: “It is my absolute opinion that Velliv is a well-run and also competitively strong pension company with good governance. From my customer perspective, there is no reason to express uncertainty about customers' savings and insurance in Velliv.

“In fact, what matters most is that customers achieve a competitive net return and that the company can maintain a competitively low cost level. That is why I am of course a little surprised or surprised when there is such a big difference in the way the companies calculate the capitalization of the future profit margins.”

Jyllands-Posten declined to comment when contacted by European Pensions.

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